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Having struck a bargain with Max Baucus, the drug industry is targeting individual House Democrats.
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By reinstituting a rebate, Waxman seeks to effectively close the 20 percentage point gap shown in his data, and the savings would be plowed back into Medicare D to fill gaps in coverage.

The most controversial of these is the so-called doughnut that impacts seniors with annual drug costs over $2,700. Medicare D covers only up to that point, after which an elderly patient must show he or she has paid $4,750 out of pocket before the government steps back in to help.

PhRMA’s deal with Baucus promises some immediate relief by lowering the cost of brand drugs for those caught in the hole of the doughnut. Waxman’s goal is to close it entirely, but that will take more time — and the income from the rebate.

In their discussion draft, released before the July 4 recess, House Democrats suggested the rebate would apply not just to “duals” but to an additional 3 million low-income seniors under Medicare D. But Waxman appears most focused on the Medicaid overlap; given the political pressures, the legislation to be introduced is likely to confine itself to the initial 6 million.

Nonetheless, PhRMA sees any rebates as a big step backward. In making its deal with Baucus, the industry believes it won a commitment from the senator that he won’t sign a final House-Senate conference report that includes what Waxman wants. When questioned by POLITICO, Baucus’s office said his commitments didn’t go that far. But the industry clearly sees this as a red-letter issue and, ideologically, one that smacks of crude price controls.

This is because the rebate itself is a function of the so-called average manufacturer price, or AMP, under the Medicaid regime. AMP reflects wholesale drug prices paid to manufacturers, with the exception of some discounted sales such as for veterans and military personnel. As a practical matter, industry officials say the cost of the rebate inevitably has a ripple effect back up the line, affecting the AMP calculation and, therefore, market prices elsewhere.

“This is a line in the sand for us,” said Ken Johnson, a senior vice president for PhRMA, who argued that the long term impact would fall most heavily of future research funding. “Eighty billion dollars is a huge amount of money and we’ve made that commitment to move comprehensive health reform forward. We believe in savings but this is about saving lives.”

Democrats disagree, and privately, industry officials will admit Waxman is not “without merit” in saying the government is now paying more to subsidize drugs for dual eligible patients than it would have under Medicaid. But the counterpoint is that previously cash-paying elderly are now benefiting from the discounted prices allowed under the Medicare D prescription drug plan. Introducing rebates into this universe could put these consumer savings into jeopardy, the companies say.

In many respects, the fight reflects the legacy of Democratic bitterness still over how Republicans rammed through the prescription bill in 2003. “It’s our money, and we want it,” one aide said, reflecting her frustration with the deals made then with PhRMA. And Democrats would argue that the savings will be reinvested in the long run to buy more medicine from the companies.

Readers' Comments (90)

The Senate and House Democrats should stand up for the people and reject the deal that Senator Max Baucus agreed to. If the people vote for those who support what Congressman Waxman wants to do, then all of the drug companies special interest political pac money means nothing.

Do you ever wonder where these companies get all all of this money to donate to these politicians? That's just a pittance of what they are overcharging you.

Congress is a bunch of pathetic immature individuals who have a base salary of $147,000 a year for a part time job. No other citizen has health benefits for part time work they should pay their own health care insurance and see how it feels to be a regular person.

Congress is a bunch of pathetic immature individuals who have a base salary of $147,000 a year for a part time job. No other citizen has health benefits for part time work they should pay their own health care insurance and see how it feels to be a regular person.

There will be all kinds of shenanigans as people try to make billions off of what is done on health care. To me it comes down to--Congress has the best public option, partially-taxypayer funded health care insurance in the U.S. Will they allow ordinary people to buy into it? If there is no public option, there is no reform. What's good enough for congress should be available to all of us.

To the poster named Ridgeback: YOU Sir Owe Victory Junction Gang $100.00 !!!!!!!!!!!

#401 Jun. 16, 2009 - 3:50 PM EST Ridgeback: Jun. 16, 2009 - 1:32 PM EST The American Recovery and Reinvestment Act is investing in America and will benefit Americans. Obama just took a page out of the FDR play book. It worked then it is working now. The Dow is slowly going up. We will hit 9000 by July 4, 2009. It is not the end of the world.

I'll take that bet for $100.00 bucks for charity ! Care to take it or are you spouting off !

I don't think so sir ! You can send a donation to the Victory Junction Gang here in NC. From TarheelCowboy. I hope you don't thinnk I'm playing ! I'm not but for some reason I feel you are though. Anyway If you are right I will send it to the united way under brokeback I mean Ridgeback. Sorry couldn't resist the word play there. I will announce it on every thread in this forum and would expect you to do the same !

Here is more "change you can count on". Pharma is driving the train and the Congress is just along for the ride. The most important part of the new Health Care Bill is the part that says, "Get re-elected ", in the next election. Not what is best for the electorate.

We send these people back to Congress year after year, they screw us year after year and we send them back again.

Call your Congresscreature and Senator today and tell him to stop screwing around and do what is right for us not them.

The most controversial of these is the so-called doughnut that impacts seniors with annual drug costs over $2,700. Medicare D covers only up to that point, after which an elderly patient must show he or she has paid $4,750 out of pocket before the government steps back in to help.

This is a load of manure! My father pays out well ove $10,000 for one single prescription to treat his Parkinson's. To add insult to injury, it's not even effective and his provider denied him an alternate drug that works much better, despite his physician assisting in the appeal. Why is it that the average worker or government employ can get a 90 day name brand prescriptions for $50 and generic for the same period at $10? This whole "you have to pay a deductible" and then pay the full price for your medications the last 4 -5 months of the year is outrageous. The average person doesn't have that kind of money. Take the above scenario and couple that with my mother's medications and it's a recipe for disaster. Little or no thought went into the Repbulican Medicare part D program other than to line the pockets of the pharmaceutical companies. No wonder they don't want a public option for health care. Because if we get one, they will actually HAVE to compete. While I'm all for captialism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

The most controversial of these is the so-called doughnut that impacts seniors with annual drug costs over $2,700. Medicare D covers only up to that point, after which an elderly patient must show he or she has paid $4,750 out of pocket before the government steps back in to help.

This is a load of manure! My father pays out well ove $10,000 for one single prescription to treat his Parkinson's. To add insult to injury, it's not even effective and his provider denied him an alternate drug that works much better, despite his physician assisting in the appeal. Why is it that the average worker or government employ can get a 90 day name brand prescriptions for $50 and generic for the same period at $10? This whole "you have to pay a deductible" and then pay the full price for your medications the last 4 -5 months of the year is outrageous. The average person doesn't have that kind of money. Take the above scenario and couple that with my mother's medications and it's a recipe for disaster. Little or no thought went into the Repbulican Medicare part D program other than to line the pockets of the pharmaceutical companies. No wonder they don't want a public option for health care. Because if we get one, they will actually HAVE to compete. While I'm all for captialism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

This is a load of manure! My father pays out well ove $10,000 for one single prescription to treat his Parkinson's. To add insult to injury, it's not even effective and his provider denied him an alternate drug that works much better, despite his physician assisting in the appeal. Why is it that the average worker or government employ can get a 90 day name brand prescriptions for $50 and generic for the same period at $10? This whole "you have to pay a deductible" and then pay the full price for your medications the last 4 -5 months of the year is outrageous. The average person doesn't have that kind of money. Take the above scenario and couple that with my mother's medications and it's a recipe for disaster. Little or no thought went into the Repbulican Medicare part D program other than to line the pockets of the pharmaceutical companies. No wonder they don't want a public option for health care. Because if we get one, they will actually HAVE to compete. While I'm all for captialism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

This is a load of manure! My father pays out well ove $10,000 for one single prescription to treat his Parkinson's. To add insult to injury, it's not even effective and his provider denied him an alternate drug that works much better, despite his physician assisting in the appeal. Why is it that the average worker or government employ can get a 90 day name brand prescriptions for $50 and generic for the same period at $10? This whole "you have to pay a deductible" and then pay the full price for your medications the last 4 -5 months of the year is outrageous. The average person doesn't have that kind of money. Take the above scenario and couple that with my mother's medications and it's a recipe for disaster. Little or no thought went into the Republican Medicare part D program other than to line the pockets of the pharmaceutical companies. No wonder they don't want a public option for health care. Because if we get one, they will actually HAVE to compete. While I'm all for capitalism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

This is a load of manure! My father pays out well over $10,000 for one single prescription to treat his Parkinson's. To add insult to injury, it's not even effective and his provider denied him an alternate drug that works much better, despite his physician assisting in the appeal. Why is it that the average worker or government employ can get a 90 day name brand prescriptions for $50 and generic for the same period at $10? This whole "you have to pay a deductible" and then pay the full price for your medications the last 4 -5 months of the year is outrageous. The average person doesn't have that kind of money. Take the above scenario and couple that with my mother's medications and it's a recipe for disaster. Little or no thought went into the Republican Medicare part D program other than to line the pockets of the pharmaceutical companies. No wonder they don't want a public option for health care. Because if we get one, they will actually HAVE to compete. While I'm all for capitalism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

Having struck a bargain with Senate Finance Committee Chairman Max Baucus (D-Mont.), the industry is aggressively targeting individual House Democrats, warning of repercussions in the 2010 elections if they go along with a tougher set of savings advocated by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.).

Personally.....for those targeted Dems I think that would be helpful..............let the voters know that you're being targeted by the Pharma Industry because you want to do something about the rising costs of drugs....

Sounds like a good opening to me!!!

"Bring 'Em On"

Hmmmm..ok...scratch that line. Sounds too much like a certain imbecile I know.

While I'm all for capitalism and making money, there has to be a fine line in how your bottom line is padded and what you give back to society. The Democrats may be for larger government, but that wouldn't have to be the case had we not been sucked down by the Republicans and the lobbyist that kept them in power for so long. This is SHAMEFUL!

Unfortunately...it's not just Republicans. Many of the Democrats that Obama is going to count on to assist with public option on the reform bill receive major $$$$$$$$$$ from the healthcare industry.